NEW YORK ( TheStreet) -- Zagg (Nasdaq: ZAGG) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- ZAGG's very impressive revenue growth greatly exceeded the industry average of 42.8%. Since the same quarter one year prior, revenues leaped by 130.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.67, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, ZAGG has a quick ratio of 2.13, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 146.15% and other important driving factors, this stock has surged by 40.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ZAGG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ZAGG INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ZAGG INC increased its bottom line by earning $0.62 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($0.77 versus $0.62).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 192.3% when compared to the same quarter one year prior, rising from $3.40 million to $9.95 million.
-- Written by a member of TheStreet RatingsStaff